Northern Pass burial is economically unviable

Why apples-to-oranges comparisons to a project in New York are simply wrong

By Tiler Eaton

Published: October 4, 2013

Opponents of the Northern Pass transmission project, many of whom would allegedly support the project if all 187 miles were buried, often point to the 333-mile, “totally buried” Champlain Hudson Power Express project as an example of economic underground transmission burial. While the projects offer similarities in that they both deliver reliable, base load hydroelectricity from Canada, the terrain and other nuances of the projects make an apples-to-apples comparison impossible.

CHPE is a 333-mile project that will carry 1,000 megawatts of electricity from Canada to Long Island. The price is estimated to be $2.2 billion, which will include a substation and the burial of 333 miles of transmission lines -- 196 miles under Lake Champlain and the Hudson/Harlem Rivers and 137 miles under existing railroad rights-of-way.

No project of this capacity and distance has ever been built underground anywhere, despite statements to the contrary made by members of the New Hampshire Senate. Currently, the longest underground burial in the world is the Murraylink connector in Australia which connects Berri in South Australia and Red Cliffs in Victoria. The project is 112 miles long, but it has a capacity of only 220 megawatts, which alleviates many of the engineering difficulties (and expense) when operating at 1,200 megawatts, as Northern Pass does.

Information about the costs of construction of the CHPE are not publicly available, but comparisons can be made to similar types of projects. The submarine section of the CHPE will be the least expensive section to lay – at approximately $1 million per mile – because laying underwater power cables is far easier and less time-consuming than underground or even above-ground construction. Underwater cable laying is also a well-established industry methodology, even at 1,000 megawatts, so much of the engineering problems have been well resolved.

Estimates for substations vary, but the Hertel substation will likely cost in the neighborhood of $250 million – which means that the remaining 137 miles of underground burial will cost $1.75 billion, or on the order of $12.8 million per mile. This is more than double the $6.2 million per mile cost associated with Northern Pass – including the nearly eight miles of underground burial.

Why would the underground portion cost so much relative to the rest of the project? This is due to the difficult and demanding engineering requirements when you bury such high capacity direct current lines, even along existing rights of way.

Northern Pass is estimated to cost $1.4 billion. If Northern Pass were to “bury it all or not at all” as some opponents have opined, the cost of burying the line would be $2.4 billion. This is assuming the same burial cost as CHPE at $12.8 million per mile – which may even be too low, given the differences in topography between the two projects.

The CHPE underground portion is through the Hudson River Valley, while Northern Pass has to go through granite bedrock and mountainous terrain. Add the $250 million for the Franklin converter station and the total project cost would balloon to $2.65 billion – nearly double the current estimate.

Northern Pass developers have been telling us for some time that a total burial would make the project uneconomical, which basic mathematics makes very clear.

Why can CHPE pay so much for its line burial while a similar strategy would make Northern Pass uneconomical? Keep in mind that the pot of gold at the end of the Champlain-Hudson Express rainbow is 25-cent-per-kilowatt-hour retail electricity rates in New York City – something I’m sure New Hampshire residents could do without – but offers a fat incentive to the developers and financers of the project.

Instead, it looks as if New Hampshire would see wholesale electricity rates from Northern Pass on the order of 5-6 cents, which would be a great benefit to the businesses and families in our region that pay some of the highest electricity prices in the country.

We all want lower electricity costs, as high costs are making it harder for businesses, especially manufacturers, to justify doing business here. Northern Pass appears to be able to deliver those lower prices while still remaining an economically viable project. Those who point to CHPE as the example need to take out a pencil and do the math themselves.

Tiler Eaton of Nottingham is a representative for the International Brotherhood of Electrical Workers and a journeyman lineman for close to 30 years.

This article appears in the October 4 2013 issue of New Hampshire Business Review